Dr. Jeff Ross - Live Well. Invest Wisely.
11/26/2023 · 110 min · transcript via mlx
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Key topics
— Dr. Jeff Ross transitioned from interventional radiology to full-time fund management at Vailshire Capital, balancing both careers via teleradiology and managing separately managed accounts and a hedge fund.
— Portfolio construction should focus on assets that outperform monetary supply growth; bonds are no longer attractive, but fixed income with 7–8% yields recently became tactically viable as rates peaked.
— Liquidity dynamics—particularly M2 money supply, reverse repo depletion, and Federal Reserve/Treasury actions—are the primary drivers of asset prices, far more than news or sentiment.
— Bitcoin's four-year halving cycle remains structurally sound; supply-demand mechanics suggest significant upside as new Bitcoin issuance halves and marginal available supply shrinks.
— Client volatility management is the hardest challenge; most cannot psychologically handle 10–20% monthly drawdowns despite understanding the concept intellectually beforehand.
— The Federal Reserve's unprecedented fiscal response (massive deficits, deficit spending) has masked underlying recession signals in manufacturing and credit, making macro prediction extremely difficult.
Market & price signals
— Bitcoin currently trades around $37,500; Dr. Ross expects a potential dip to $30,000–$25,000 if major negative news breaks and views that as a buying opportunity given his multi-year bull thesis. The reverse repo market has depleted from $2.5 trillion to below $1 trillion (now ~$900 billion), approaching zero in Q1–Q2 2024; this depletion is a countdown timer for potential bond market turbulence and forced central bank intervention. Oil sits near $77–$78/bbl (down from $90), signaling a still-functioning but softening economy. The dollar and treasury yields peaked recently; Ross moved into fixed-income and senior loans at 7–8% yields, expecting capital appreciation as rates decline. Manufacturing in the US has contracted for over a year, but services remain mildly expansionary, preventing recession so far. Credit is tightening (senior loan officer reports), but government fiscal stimulus ($2+ trillion annual deficits) is offsetting the contractionary effect. Ross assigns equal probability (~33%) to three scenarios: major recession/depression, soft rolling recession, or continued expansion with Bitcoin and tech higher.
Actionable insights
— Use macro signals (liquidity, dollar strength, oil, unemployment, high-yield spreads widening) as decision triggers rather than daily price moves; position for the reverse repo depletion in early 2024 by trimming fixed income and shifting into Bitcoin and cash ahead of potential turmoil.
— Phase out non-Bitcoin equities and fixed-income allocations gradually into the Bitcoin halving (April 2024) and beyond, since the halving's supply-demand mechanics should drive a 24-month bull market; be prepared for 10–20% monthly volatility and consider it the price of outsized long-term gains.
— Build portfolios around assets that structurally outperform monetary debasement (Bitcoin, quality equities, selective fixed income at high yields); avoid real estate, traditional bonds, and non-leveraged currency plays unless they demonstrate yield or deflation signals.
Episode sponsorships
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